Who’s Whining Now?

Who's Whining Now?

Former Senator William Philip “Phil” Gramm, PhD., has stepped down as co-chairman of Senator John McCain’s Republican presidential campaign. As Larry Rohter of the New York Times explains:

Mr. Gramm, a multimillionaire banker, has been under fire since last week, when he dismissed concerns about the troubled economy by referring to “a mental recession.” He also said the United States had become “a nation of whiners . . . .”

Senator McCain distanced himself from those remarks, and Professor Gramm resigned from the campaign. “It is clear to me that Democrats want to attack me rather than debate Senator McCain on important economic issues facing the county,” he whined in a written statement.

As a Senator, Professor Gramm chaired the U.S. Senate Committee on Banking, Housing, and Urban Affairs (1995 to 2000), stripping safeguards from the U.S. financial system through the Gramm-Leach-Bliley Act in (1999) while receiving $1 million in campaign contributions from the securities industry. He was a master of the shopworn but effective ploy of yammering about “deregulation” in order to enrich oligarchs through the pretense of populism.

After leaving the Senate, the Professor, now Senior Vice Chairman of UBS (the Swiss investment bank that consumed Paine-Webber), lobbied Congress, the Federal Reserve, and the Treasury Department about banking and mortgage issues in 2005 and 2006. Treasury Assistant Secretary for Financial Institutions Wayne A. Abernathy just happens to be the former Senate committee Staff Director to Senator Phil Gramm.

Worried about the price of oil? According to the Washington Times – McClatchy-Tribune Information Services:

As much as 99 percent of the market for U.S. premium crude oil is dominated by big financial firms, hedge, pension and index funds seeking short-term profits from oil’s rise. The speculative free-for-all is enabled by a regulatory exemption called the “Enron loophole,” after the now-defunct Houston energy-trading firm that successfully lobbied for its enactment in 2000.

Who put the “Enron Loophole” into the Commodities Futures Modernization Act? Senator Phil Gramm. Who was on the Enron Board at the time, and even on the Audit Committee of that notorious corporation? Dr. Wendy Lee Gramm, Professor Phil Gramm’s spouse. Ah, togetherness.

While Professor Gramm unhooked economic safeguards in Congress, Dr. Wendy Gramm was doing it through the Executive branch, heading the US Office of Management and Budget (OMB) Office of Information and Regulatory Affairs (OIRA, 1985-88), directing a White House anti-oversight hit-list called the Presidential Task Force on Regulatory Relief,  and chairing the Commodity Futures Trading Commission ( CFTC, 1988-93).

The CFTC exempted energy futures trading as requested by Enron, a major source of campaign funds for her husband. A week later, Dr. Wendy Gramm resigned from CFTC, and five weeks later she was on the Enron Board of Directors, paid between $915,000 and $1.85 million in salary, fees, stock option sales and dividends. Wendy Gramm’s Enron stock options, valued at $15,000 in 1995, were worth $500,000 by 2000 (source: Public Citizen).

Dr. Wendy Gramm is currently a Distinguished Senior Scholar at an anti-regulatory think tank at George Mason University, tours the country making speeches at $4,500 a pop, and serves on the boards of eleven corporations in industries she and her husband “deregulated.” I’m not sure about the number of boards; that might include the Enron (which collapsed in 2001-2002) and others that have self-destructed through “deregulation,” with collateral damage to other businesses, the entire economy, and the rest of us.

John McCain is still defending the “Enron loophole.” The Gramm legacy lives on in the Republican Party as well as the mortgage and banking meltdowns, housing industry collapse, stock market dive, butter-soft U.S. dollar, foreclosure and unemployment tsunamis, and high oil and food prices.

Doctors Wendy and Phil Gramm must be so proud.

Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com

19 Responses to “Who’s Whining Now?”

  1. Lawrence E. Rafferty Says:

    I don’t call it the Enron loophole. I like to think of it as the Gramm loophole. I doubt that McCain will actually distance himself completely from the Grammster. He never really fires anyone. Especially an old co-felon like Phil Gramm. Good information about Wendy Gramm. I learned that the whole family can play the lobbying and influence peddling game.

  2. Jim Says:

    Great article, but you just raised my anger level even higher. I had read about leading up to 2000 and after 2002. This is the first time I read about Bush, Cheney, Rove, and other members of Congress that did not do anything.

    Their needs to be more articles. Hopefully to get people to realize how bad things were. In addition, to move Congress to impeach Bush.

  3. Mike Licht Says:

    Jim says: This is the first time I [have] read about Bush, Cheney, Rove, and other members of Congress that did not do anything.

    Jim — What the Gramm family did was dismantle the laws safeguarding the US economy from two directions: the Congress (Senator Phil Gramm), and the Executive (Dr. Wendy Gramm). They did away with these time-proven laws under the name of “deregulation” and “modernization.” Many of these safeguards were put in place a century ago by members of their own party (the Republicans or GOP) to fix economic conditions like those the Gramms and their allies have now caused, conditions which have undermined the world economy.

    President Bush and Vice-President Cheney head the US Executive Branch. Rove was in this branch too — he resigned, but remains influential. In the US system, unlike the Parliamentary systems of other countries, the Executive Branch (the President and agencies run by his cabinet members) is meant to counter-balance the power of Congress (our two-house parliament) and the Courts.

    When one US political party has a large majority in Congress as well as the Presidency, and has also appointed most judges in the high courts, the system is unbalanced, and the party in power is free to plunder at will. The President, Congressmen and Senators serve for a set term, so there is no opportunity to change governments quickly by a “Vote of no Confidence” as there is in other countries. Political change can only occur at set intervals, such as the coming US Presidential election.

    The self-enrichment of the Gramms after leaving government is common to officials of both US political parties, but the involvement of the Gramms in banking and commodities and investment trading (including the notorious case of Enron), the same industries they “deregulated” for the benefit of the few and to the peril of millions of people around the world, deserves to be more widely known.

    “Impeachment” means that the entire Congress votes to charge the President (or other top Federal officials in the Executive or Courts) to a form of trial before the Senate, which hears the charges and votes on his or her guilt. It is a long process and Mr. Bush has only a few more months in office. It will not happen. There are other judicial forums in the world, though, and other crimes for which there are no statutes of limitation.

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